Claims for substantial financial hardship or loss
When an employer claims to have suffered substantial financial hardship/loss by reason of the absence of the employee/Reservist, the employer may make application to the Director ESP Scheme, through the Reservist's ESP Delegate, for payment of ESP in a higher amount.
Before ESP can be paid at a higher level, it is necessary for the employer to satisfy the Director, Deputy Director or Assistant Director ESP Scheme of the following requirements:
- the employer has suffered substantial financial hardship or substantial financial loss by reason of the employee's absence;
- it was not possible in the circumstances for the employer to make adequate arrangements to avoid the substantial financial hardship or substantial financial loss by reason of the employee's absence;
- all reasonable efforts were made by the employer to avoid or limit the adverse financial consequences;
- allowances such as Locum Tenens Allowance and payment of ESP at the normal level are not sufficient to redress the substantial financial hardship or substantial financial loss suffered by the employer; and
- the employer applied for ESP on a hardship or loss basis as soon as reasonably possible after becoming aware of the circumstances giving rise to the substantial financial hardship or substantial financial loss.
Employers should outline the circumstances and set out the basis for the application, including the amount being claimed. Employers are required to provide documents, information and verification in satisfaction of the requirements listed above.
It would be difficult for some employers, by reason of their nature or size, to establish a case for payment of ESP on a financial hardship basis. This would include Commonwealth Government bodies, State and Territory departments and agencies, Local Government bodies and organisations, large corporations and other companies who have the ability to make adequate arrangements to cover the absence of an employee. In many cases, these employers will be able to cover the absence of the employee by rearrangement of rosters or revised work arrangements. However, in cases where a substantial financial loss is incurred by reason of the absence of the employee, these employers may be entitled to claim ESP at a higher level.
Substantial financial loss means a loss incurred, or that will be incurred, in the ordinary course of the employer's or self employed member's business because of the absence of the member on Defence service and excludes:
- a loss of a remote, speculative, or indirect kind;
- a loss that has not yet occurred and is not certain to occur;
- a loss of a personal nature or incurred in a personal capacity; or
-
a loss incurred or that may be incurred other than in the prudent and reasonable conduct of the business.
Eligibility with respect to other allowances. If Civil Practice Support Allowance or Sessional Fees are payable in relation to the period of Defence service, an employer or self employed Reservist is not eligible to apply for ESP on a hardship or loss basis.
Processing Hardship/Loss Claims
Applications under the substantial financial hardship/loss provisions should be submitted, using standard claim forms, to the Reservist's ESP Delegate. The claim form should be annotated as submitted on hardship/loss grounds and accompanied by a supporting letter and evidence covering the elements listed above. The claim form will be forwarded to the Director of the ESP Scheme for adjudication. The Director, Deputy Director or Assistant Director may approve or refuse the claim.
Once the Director, Deputy Director or Assistant Director has decided the outcome of the claim, the employer and the unit commander or ESP delegate will be advised of the result, in writing. Should the claim be approved, the written advice will specify the amount of ESP that is payable.
Information
For further information on the substantial financial hardship/loss provisions, please ring the ESP Help-line on 1800 803 485 or email esp@defence.gov.au
Processing Hardship/Loss Claims
Applications under the substantial financial hardship/loss provisions should be submitted, using standard claim forms, to the Reservist's ESP Delegate. The claim form should be annotated as submitted on hardship/loss grounds and accompanied by a supporting letter and evidence covering the elements listed above. The claim form will be forwarded to the Director of the ESP Scheme for adjudication. The Director, Deputy Director or Assistant Director may approve or refuse the claim.
Once the Director, Deputy Director or Assistant Director has decided the outcome of the claim, the employer and the unit commander or ESP delegate will be advised of the result, in writing. Should the claim be approved, the written advice will specify the amount of ESP that is payable.
Information
For further information on the substantial financial hardship/loss provisions, please ring the ESP Help-line on 1800 803 485 or email esp@defence.gov.au
